A public power play over CEO pay

President Barack Obama is looking like he’s about to get caught in the middle of another tense showdown between labor unions and corporate America over federal rules on CEO pay.

The Securities and Exchange Commission has yet to finalize a requirement from the 2010 Dodd-Frank financial reform that companies disclose how much their chief executives earn compared with a typical employee. But already, AFL-CIO President Richard Trumka is turning up the pressure on the White House to deliver on Obama’s rhetoric about income inequality and lean harder on the SEC to finish things up.

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“The administration could be more aggressive when it comes to pushing the regulations with the SEC,” Trumka said. “I have no idea why they’re delayed.”

But the unions know — it’s no secret — who’s been fighting the implementation.

A coalition of 22 trade associations, including heavy hitters like the American Petroleum Institute, the Business Roundtable, the National Retail Federation and the U.S. Chamber of Commerce, claim the new disclosure would cost a publicly traded company more than $7.6 million a year — and without doing much good.

“We don’t believe the pay ratio provides useful information,” said Timothy Bartl, the point man on the issue as president of the Center on Executive Compensation. “It’s a significant resource-intensive exercise that detracts from resources for companies, especially when they’re trying to increase jobs.”

The industry says calculating median pay at companies is complicated and doesn’t provide the public with meaningful data when making investments. It maintains the requirement is more about political optics.

To determine average earnings, companies say they have to factor in salaries for employees abroad, measure the value of pension benefits, distinguish between part-time and full-time workers, and the use of company cars, among other things. The firms just don’t have the data centralized and need to develop them.

The industry has ramped up efforts to press its case with lawmakers and regulatory officials, after Obama signed the JOBS Act earlier this month and — acknowledging the financial burden — exempted firms issuing stock that have less than $1 billion in revenue from reporting the pay ratio, among other regulations.

The associations also have allies in the Republican-majority House. Rep. Nan Hayworth (R-N.Y.), sponsor of a bill to repeal the mandate for every company, sees the administration as vulnerable in an election year when voters care most about job creation.

“Clearly, this is not an issue that we’re going to let rest,” Hayworth said. “It is a provision that does take precious resources away from where they desperately need to be — the productive economy.”

Obama has pledged to make fairness the guiding principle of his economic policies, and the surge in CEO pay is a leading cause of income inequality. But at the same time, Obama has tried to counter Republican criticism that government regulations have suppressed hiring by sponsoring initiatives within his administration to eliminate red tape.